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Put on your economist hat and let’s take a look at the past decade of unemployment rates in Sacramento County based on the month of June. What do you see? Comments are welcome below.
June 2010 12.6%
June 2009 11.5%
June 2008 6.9%
June 2007 5.4%
June 2006 4.9%
June 2005 5.1%
June 2004 5.9%
June 2003 6.3%
June 2002 5.8%
June 2001 4.5%
I’m a fan of good news, so I wanted to share something with you. A property owner I helped last December just got word that the Sacramento County Assessor has agreed with my opinion of value for his property. They had 
previously assessed his Elk Grove home for 2009 property taxes at $945,000, but my company provided detailed support to show his assessed value should be at $750,000. The Assessor’s office agreed!!! This means the home owner will receive a refund check around $2,000 because he overpaid on property taxes in 2009.
This particular home owner contacted me literally a couple of days before the deadline to dispute property taxes last year. It’s a good thing he reached out too because otherwise that $2,000 refund check wouldn’t be showing up in the mail.
As a side note, when an appeal is filed and the Assessor ends up agreeing with the appeal, they’ll send you a “Tax Change Withdrawal of Application for Changed Assessment.” Basically this means they are asking you to formally agree to the new opinion of assessed value and simultaneously withdraw your appeal. Usually home owners I help have some questions during this phase because nobody wants to sign something that sounds so unfamiliar. But if the value looks good, you should sign off. There is no reason to keep the appeal in process or pursue an appeals hearing if the Assessor has already agreed to an accurate reduced value.
I love stories like this and I’ve been hearing quite a few of them lately too. It never gets old to hear a home owner will get a refund check of $2,000. Keep me posted if it looks like you might need help or if you simply want me to check out if there is a potential savings for you. Call me at 916.595.3735 or see www.SacramentoTaxAppeals.com.
My Realtor friend Jenifer Miller invited me yesterday to give a 90-minute talk to a group of new real estate agents at Lyon Real Estate in Elk Grove. It was fun and I hope overall helpful too as we discussed how to more effectively communicate with appraisers in an HVCC world as well as a few tidbits on FHA minimum requirements.
Anyway, one of the members of the class brought up a great question. He asked how properties could not be worth at least their replacement cost. The truth is that we see so many properties in the Sacramento area selling far below what they would actually cost to build from scratch (cost of land + all improvements).
That’s the nature of the market these days. But why is that? There are many factors to consider. Do you remember the real estate bubble? It 
couldn’t have lasted forever. Property values really climbed too quickly to enormously high levels, didn’t they? When the bubble burst, it changed the real estate market. There ended up being a huge oversupply of distressed properties listed on the open market, and these REOs set the pace for the rest of the market. Keep in mind too everything that was going on in Wall Street, the bailouts, and the economy beginning to sincerely struggle. All of these factors (and more) influenced property values.
Moreover, check out unemployment figures to the right for both Sacramento County & Placer County. These April 2010 stats from the Employment Development Department show an unemployment rate of 12.5% in Sacramento County and 11.5% in Placer County. Let’s contrast this with data from April 2006 that shows the unemployment rate was 4.8% in Sacramento County and 4.3% in Placer County. Things changed, didn’t they? In light of unemployment rates being significantly higher nowadays, do you think buyers could really afford to purchase houses right now at 2006 levels?
What do you think? I’d love to hear your insight.
Yesterday I posted a graph showing the difference between assessed value and market value. Today I have one more real-life example of this phenomenon. The property below was assessed at $210,000, and after my tax appeal process I determined the home to be worth $130,000. That’s quite a difference and represents roughly $800 in taxes. Ouch.
The subject property is around 1400 square feet and all blue dots above represent the past 2.5 years of neighborhood sales between 1200-1700 square feet. This range of square-footage is meant to show comparable properties to the subject since a typical buyer would likely look in this range when house hunting. The vertical line represents January 1, 2009, which is the date of assessment.
As you can see, an assessed value at $210,000 looks higher than basically all sales in the neighborhood, and actually more consistent with a home value from previous months or years. It’s true that a property can sometimes sell at the highest level in the neighborhood, but the subject property does not warrant such a circumstance. When observing recent sales above $150,000 in the market, it’s clear that the vast majority of these sales come from superior tracts in the market area or are remodeled throughout (sold above all other sales because of upgrades).
I am not saying the Assessor’s Office gets it wrong in every case. That’s not true, and I certainly do not wish to vilify the Assessor because that’s not the way I do things. I’m simply saying that in this case, and in others I have worked on lately, assessed value should have been much lower. I typically take on tax appeal situations where the home owner is clearly over-assessed, and so there is an obvious potential economic savings to be had. Most of the properties I did not take on this year were assessed fairly well or off by 5-10% (too high).
If you have questions, give me a call at 916-595-3735.
www.SacramentoAppraisalBlog.com The Assessor says $210k, but Market Value is $130k: A Real Life Property Tax Appeal Situation